Wal-Mart, Kohl's plan seasonal hires; Holiday sales seen up

Holiday decorations in the lobby of New York's Time Warner Center, a high-end mall.

With forecasts predicting a somewhat lackluster holiday shopping season ahead, retailers are positioning themselves with a cautious consumer in mind.

On Monday, discount giant Walmart, the U.S. unit of Wal-Mart Stores, announced plans to hire 55,000 seasonal workers. It's also going to move more than 35,000 associates from temporary to part-time and another 35,000 associates from part-time to full-time. Last year, Walmart said it hired more than 50,000 seasonal employees. To lure shoppers, it plans to go after sales and invest in price, the company had previously said.

Competitor Kohl's said it plans to hire more than 50,000 season workers this season. While the company plans to decrease the number of seasonal workers it hires per store, it will increase the number of positions at distribution centers and credit operations.

As the economy continues to improve at a steady gradual pace, one research firm expects sales during the crucial holiday season to improve moderately.

Sales are expected to rise between 4 percent and 4.5 percent in the November to January period to a range of $963 billion to $967 billion, according to a forecast from Deloitte released on Monday. While moderate, this increase is in line with the 4.5 percent the firm saw last year.

Non-store sales, which include online, catalog and interactive TV purchases, are forecast to perform even better and rise 12.5 to 13 percent.

"We're cautiously optimistic—we've seen momentum throughout the year," said Alison Paul, vice chairman of Deloitte and retail and distribution sector leader. "Though economic news continues to be mixed, our economists believe we have positive momentum going into the holiday season."

Throughout the year, consumers have faced a long string of concerns, including continued high levels of unemployment, the expiration of a 2-percent payroll tax cut and higher gas prices.

This has been balanced out by several positives for the consumer, including a rising stock market, increasing home values and job creation.

"What you see is two different sets of attitude," Paul said. "For the well-heeled consumer, they are feeling good, so high prices or a 2-percent payroll tax—that doesn't mean much for them. But for the lower-end consumer, those are two different real impacts on their budget."

This environment has produced what Citigroup analyst Deborah Weinswig termed in late-August a very "C.H.E.A.P." consumer—a buyer who's more interested in spending on cars, housing, ecommerce and home products than on apparel, electronics or home goods. Weinswig expected the theory to last into the back half of the year.

Lens of caution

Already retailers are treading cautiously as they enter the season.

Target said Friday that it plans to hire about 20 percent fewer seasonal workers than it did last year. No doubt the discount retailer's expected staffing needs are being colored by the trends it has being seeing this year.

Target has said shoppers were hurt by this year's payroll tax hike, particularly its lower- and moderate-income customers. In its most recent ended quarter, Target saw a small decline in traffic to its stores.

"While emerging strength in the housing and automotive sectors is a long-term positive, the near-term spending on these big-ticket items is crowding out other spending particularly in today's environment in which access to consumer credit remains tight," CEO and Chairman Gregg Steinhafel told analysts in late August.

CNBC's Courtney Reagan speaks to Jan Kniffen of J. Rogers Kniffen, who picks retail stocks he says will fare well no matter what the outcome of the Christmas shopping season.

"So far, we didn't see any reduction in orders for what was planned for Christmas; rather, some retailers are postponing the shipments because I believe they want to have a bit more visibility on the back-to-school season," Scannavini told analysts.

After seeing its inventory increase 6.9 percent during its recent quarter due primarily to softer-than-foreseen sales trends, Wal-Mart plans to go on the offense.

In mid-August, the company's CFO and Executive Vice President Charles Holley said its "expectations for the back half of the year are through the lens of cautious consumer spending," adding that it has an aggressive plan to go after sales and invest in price.

Part of its aggressive holiday plan includes dropping the fee for its popular layaway program. Competitor Kmart, a unit of Sears Holdings, has also upped the holiday ante with its layaway program by airing the earliest holiday ad ever with 105 days to go before Christmas.

Calendar shift

In addition to a cautious consumer, retailers will also be watching the calendar this season, which will squeeze the traditional holiday season this year.

Due to the placement of Thanksgiving this year, there will be six fewer days between the holiday and Christmas this season—a shift that could benefit shoppers.

"We think the impact probably more likely will be seen in the promotional schedules and the way retailers pace themselves on markdowns," Paul said. "We don't think that the six days will take out as many sales as six days would have 10 or 15 years when consumers didn't have as many choices besides going to a store.

Macy's Chief Financial Officer Karen Hoguet told analysts last month that although customers have fewer days to shop, they still only have a certain amount of money to spend on gifts.

"Last year, the Christmas season felt like it went forever, and I think the compression may add to more excitement and frenzy, which could help business," Hoguet said.